Goldman Sachs anticipates that the Japanese yen will continue to weaken against the Swiss franc, driven by the relative correlation between the two currencies and Japan's domestic inflation trends—despite the yen's recent strength following the lower house election. Strategist Isabella Rosenberg noted in a report that, overall, the yen serves as a better safe-haven asset in an environment of negative economic growth, whereas the Swiss franc is a more effective hedge against inflation risks. However, over the long term, relative inflation remains the primary driver for the Swiss franc/yen exchange rate. The recent decline in the Swiss franc against the yen "suggests that the market expects the Bank of Japan to respond more hawkishly to the recent lower house election." Unless the Bank of Japan "implements interest rate hikes more swiftly or fiscal policy becomes more restrained," pressure for yen depreciation is expected to persist.
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